This morning I lost a little trying to scalp TSLA calls. I bought $1050 calls when shares were around 1070 (yellow circle). I had a target to sell at 1079 (ORH, green line) with a mental stop at 1066 (red line). I was watching it on the minute chart to be able to pull the trigger on selling as fast as possible. Due to a bit of lag through ATP and how fast it moves I was still not able to catch the spike (white circle). I ended up selling around the blue circle area.
If when I purchased these I had done a quick estimate of a target sales price using the delta of the 1045 calls, I could have set a limit sell order for the top end. The math isn't hard:
(1079-1070)*[delta]+[buy price]=[target sell price]
There would be a bit more added premium, but that would have gotten me close enough. I could have gained 5%-6% on the trade instead of losing 5%. I could have had a "replace order" window open to change that upper limit order to bail out if it went away from me, so I wouldn't have lost any flexibility by opening that upper limit sell order.
The point here is if you have a target to sell all or a portion of your contacts, go ahead and place a sell order instead of relying on yourself to execute it. Even if you're paying attention to it you might miss on your scalp.
